Pearl Inc
Subject:FinancePrice:2.86 Bought5
Pearl Inc. has preferred stock valued by the market at $25.5 per share. The preferred stock pays a steady annual dividend of 5% based on a par value of $100. If the company’s marginal tax rate is 35%, the cost of Pearl preferred stock is ________.
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Cost of preferred stock = dividend / market price
Cost of preferred stock = ($100*5%) /$25.5
Cost of preferred stock = 19.61%
